Shane Black the director of iron man 3 wanted to show the clash between two extremely powerful individuals who have exclusive access to dangerous technologies, this was to show what impact this kind of clash would have on the world and how Tony Stark as a character would react it. He wanted to make a stew of technologies and how they would shift and expand the Marvel world alongside them. Particularly Shane wanted to show the evolution of Iron man’s armor which now included electronic implants within Tony Starks body.
The Mandarin was meant to be the representation of fear, an all-encompassing global villain, someone who everyone is aware of but no one can find because of the money and technology Killion had access to. He wanted to show what would happen if someone like that got access to technologies like the War Machine Iron Man suit, healing factor and heat emission of the Extremis. With such dangerous technologies even the most powerful man in the world, the USA president could be abducted and taken hostage. All this was to draw parallels to countries like North Korea gaining nukes or nukes falling into the hands of extremist terrorists. Overall the movie was written to show the fallout caused by leaking of such technologies and the evolution of the Iron Man suits capabilities such that it could match up to the new threats in the Marvel world.